Tet wish for Vietnam: shed the corruption skin in the Year of the Snake!

A version of this blog was published on Thanh Nien Newspaper on February 1, 2013

A painting by Ha Huyen Thuong, a lower-secondary student in Thai Nguyen, says "Corruption is an illegal behavior."

It’s that time of year again. The time when a great Vietnamese Tet tradition of celebration gets subverted by firms seeking favorable treatment by public officials. In a new World Bank and Government Inspectorate survey on corruption* released in late 2012, the majority of firms said that they had presented gifts to public officials on the occasion of public holidays or festivals in the previous year: 44% of firms said they gave such gifts to the tax agency, and 20-30% gave to their sectoral regulators, banking and the local police.

Giving gifts to friends and family is a Tet tradition and a sign of personal respect between Vietnamese people. But why would firms give gifts to public officials?

Skeptics may argue that these holiday gifts are different from bribes, since they are clearly voluntary. It turns out that most bona fide bribes are also given voluntarily, albeit sometimes grudgingly. The survey, which covered 1,058 firms in ten provinces, shows this: 44% of firms had given gifts or money in their latest interaction with different state bodies, and the usual suspects led the list: taxation, sectoral administrative agencies, banking, traffic police, customs, and others. And for each of these agencies, more than 75% of those who paid said that it was initiated by the enterprise itself.

That does not mean that the officials who receive such gifts and payments are off the hook. Firms and citizens alike complain that officials make difficulties for them, and they feel they must pay. But the payments are given all too readily. More than half of firms say that when they encounter problems from state agencies, they give gifts or money to the officials in charge; 63% of firms say that informal payments “create unspoken mechanisms to get things done quickly.” And indeed, from a short-sighted perspective the bribes may seem effective.

But firms take note: those firms that were quicker to bribe have not been doing better; they are actually growing more slowly than firms that don’t pay bribes. Paying an extortionist only encourages more extortion, and making unofficial payments only feeds—“fertilizes” might be a better word!— the culture in which bribes are expected.

Seeking alternatives to bribery is a better business strategy: know the procedures and follow them without seeking shortcuts; know your legal rights and demand them; work collectively to push for transparency and administrative simplification. The surveys show that such policies work: Provinces with the most attention to openness and transparency (according to officials) had 40% less bribery (according to firms); provinces with the most attention to administrative reforms had 35% less bribery.

Working collectively is easier said than done, but some firms are up to the challenge. In 2007, the Saigon Hi-Tech Park (SHTP) and Intel signed an MOU agreeing to do business “ethically and within the bounds of applicable law, to act against corruption, bribes, kickbacks and any forms of abuse of power for personal interests …”. The SHTP, with support from the Vietnam Anticorruption Initiative 2011 (VACI), has gone on to broaden the ethics base by inviting firms to sign a voluntary pledge to behave ethically, and by now twelve firms, half the number of occupants of the park, have signed such MOUs.

The regulation of gifts faces two problems. The law is not completely clear on which ones are illegal, and the provisions that do exist are not enforced. How big is too big? The laws provide rules for gifts that public officials or public agencies can give, but not for gifts that can be received by public officials. The absence of legal provisions governing behavior within the private sector exacerbates the problem.

According to media reports, these gifts can be substantial. One newspaper article about Tet gift-giving went so far as to say that companies give apartments, plots of land or “long-legged women” to bosses of agencies that help those companies.

Clarifying and enforcing the rules on gifts would pay off. The survey shows that bribes by firms were 50% less prevalent in places that more seriously implement other rules, such as those on entitlements, norms and standards. If the rules on gifts are similarly clarified and enforced, the ambiguity on which corruption feeds will be removed.

It is far too easy to point to shortcomings in the legal framework and make excuses for waiting. Just as the vicious circle of bribery is fed on both the demand and the supply side, the solutions can be found in both public sector reform and private sector behavior. Tet is a time for celebration, not for corruption. Let the year of the snake be the year when the snake sheds its old, corrupt, skin to reveal a new skin of integrity.

* Corruption from the Perspective of Citizens, Firms, and Public Officials—Results of Sociological Surveys was released on November 20, 2012 by the Government Inspectorate and the World Bank and undertaken with support from UK-AID, and UNDP.

Comments

Tell them Jim! Learn the lesson of America where corruption is non-existent and where everything works, perfectly. Show them we legalize corruption with former government officials becoming highly paid lobbyists, to write loopholes into laws. We apologize when involved with long-legged females, resign for a while and get back into the business of the people again.

Thanks for the comment. Every discussion of corruption must acknowledge that corruption is a global phenomenon, albeit one where the main challenges in one country may differ from those in another. As you sarcastically note, the US (and every country) faces its own challenges. But just because all have a disease, of different forms or at different stages, that doesn't mean that none should address the disease.

I think it is easier said than done especially when bribery is so rooted in people's daily life. Ordinary people have an ingrained belief that gifts buy them the quickness and results that they want. So many business, even foreign ones, would have to adapt to this notion in order for them to have success, even in the initial stage. How can you push for public sector reform and changes in private sector behavior without changing the fundamental belief first?